Partners bank on niche market for unique liquors

Matthew Bagdanovich knows the price to make a business dream come true: everything he owned and saved.

By Fred HiersStaff writer

Matthew Bagdanovich knows the price to make a business dream come true: everything he owned and saved.

The 52-year-old former insurance adjuster gave up his six-figure salary working in Mexico and England, his Hallandale condominium along Florida's intracoastal waterway, and his life's savings, and used it all to help fund his dream.

But the Daytona-born entrepreneur has no regrets about sinking nearly every dime into Marion County-based Fish Hawk Spirits, one of only 11 absinthe distilleries in the United States and the only one that makes a red absinthe liqueur, Absinthia Rubra.

The company, which Bagdanovich owns with Jim Brady and Chris Howard, also makes Marion Black, a citrus distilled brandy that incorporates locally grown tangerines during the fermenting process.

"You cannot win if you won't risk," Bagdanovich said, standing in front of his distillery operation, which fits into a backyard storage unit. "It's only going to work if you work at it. It's not going to succeed by magic. We've sunk everything into this. We need it to succeed."

The distillery is nestled off dusty dirt roads where most GPS units have no notion of direction. The property is lined with trees, and neighbors are rare in the sparsely populated area. Bagdanovich and Brady said it's not the area most customers picture when they think of a high-end alcoholic beverage.

Bagdanovich began the fledgling business after working several years overseas and five more years here. By 2004, he knew he wanted to go into business for himself. His only plan was that he wanted to make something he thought was recession proof and for which there was a business niche. He had limited experience drinking the high alcohol beverage absinthe, and only limited experience making a citrus brandy while living in Mexico.

But timing for a new absinthe business was on his side, he thought.

Absinthe is made from Artemisia absinthium, also known as wormwood, together with anise, fennel and other herbs. It originated in Switzerland in the late 18th century and became especially popular in 19th- and early 20th-century France.

Along with other spirits, absinthe was banned in the United States during prohibition, but also was kept illegal until 2007 because it has a trace amount of a hallucinogen called thujone.

Bagdanovich, Brady and Howard thought they could get in on the ground floor of the market once absinthe was again legal. The three have spent $250,000 thus far on the initial stages of the business.

Bagdanovich shook his head remembering how his wife, Cristina, allowed him to sink their savings in the new business.

"My wife went from being (the wife of) a insurance subsidiary CEO to living in a Jim Walter Home," he said.

To distinguish their absinthe from the green-hued drink associated with Europe, Bagdanovich and his partners created Absinthia Rubra, which has a red hue.

"We've established the American standard with this," Bagdanovich said.

The company, which employs only one person so far, also produces the Marion Black citrus distilled brandy that is a side product of Absinthe Rubra production.

Bagdanovich has a distributor and his first order, which will put the beverages in liquor stores and bars throughout the Tampa and Orlando areas, including Ocala and Gainesville. The Absinthia Rubra retails at about $65 a bottle; Marion Black for $25.

Bagdanovich and Brady said their beverages are priced at the high-end, but that was the niche they wanted to fill, given that profit margins for most other spirits were too lean.

For Brady, the challenge of starting a business from scratch was worth the risk and his financial stake in the company is almost as deep as Bagdanovich's.

The 65-year-old construction manager retired early and, with his wife Jacky, had a financially comfortable nest egg socked away to live from. That money is now gone, and the one-acre lot zoned for agricultural use he was renting and meant to later flip is now used to house the Fish Hawk Spirits facility. Bagdanovich and his wife now live in a small home on the property.

The company recently passed its distributor's taste test and is filling its first order. Bagdanovich is anticipating selling as many as 10,000 bottles of the two beverages this year.

The Absinthia Rubra is used with a sugared water to make a Sintini and Marion Black is used to make a Triple Sec and Vermouth alcoholic concoction.

"But no one is going to spend $10 to $20 for a Sintini if they don't know what it is," Brady said.

So, Bagdanovich and Brady spend much of their time meeting with bar managers and owners to set up marketing projects and offer free taste samples to bar patrons.

Bagdanovich said bar owners are usually impressed the manufacturers are willing to work so hard at marketing their products rather than leaving it to distributors to do the work.

The company's products are sold in Ocala at the Horse and Hounds Restaurants and Pi on Broadway.

"You have to educate people how to use it, and we do serve various drinks with it," said Horse and Hounds manager Leigh Gallups of the absinthe. "I like the product. I think they'll do relatively well."

Both Brady and Bagdanovich said they have no regrets — even if the business fails.

Bagdanovich said if that happened, he would likely have to go back to insurance work.

"But I won't be setting at my desk asking myself what would have happened," he said. "It a quintessential story, and I'm delighted to do this."

The only other local distillery is Florida Farm Distillers in Umatilla, which makes whiskey.